Former office furniture Steelcase executive at its helm of Ford transforms it
Detriot,May25:Ford’s new CEO – a 62-year-old former office furniture executive now tasked with jump-starting the world’s oldest automaker amid frustrations over the stock price and growing threats from Silicon Valley rivals – is not exactly a household name. But in management and design circles, as well as in Silicon Valley, Jim Hackett has long been something of a star for his transformation of Steelcase and his ability to foresee big changes in the way people work.
Since getting the top job at Ford, he’s been frequently described as a turnaround specialist, thanks to his record at Steelcase, which involved deep job cuts and a reimagining of the company’s business, as well as his recent tenure as athletic director at the University of Michigan, where he brought in NFL coach Jim Harbaugh to revive the football program’s fortunes.
But management and design experts say that phrase gives short shrift to the traits that make Hackett an inspired choice to take the helm at Ford: Experience running a family-owned company, an early adoption of the now popular “design thinking” approach to product development, a willingness to learn from outsiders and stay hands-off with investments, and a constant focus on the future of consumer behavior.
“He’s focused on trying to uncover the non-obvious needs people have. What would make their life better? What they would actually value if you gave it to them?” says David Kelley, a longtime friend of Hackett’s and the founder of IDEO, the well-known design firm in which Steelcase once held a majority stake. (Ford is currently working with IDEO as a client, an IDEO spokeswoman confirmed, and Steelcase retains a very small stake in IDEO.)
Many management experts see parallels in Hackett’s work reimagining the spaces where people work and the ones where they drive in an industry that is also undergoing wrenching change. “Everything from Uber to driverless cars – there is a massive transformation happening in the auto industry,” said Noel Tichy, a University of Michigan management professor who has worked with Hackett in the past and written about him in several of his books. “He’s done it before. The fundamental skill sets are the same.”Steelcase, a company with $3 billion in annual revenue, might seem an unusual proving ground to running Ford, one of America’s most iconic companies with more than $141 billion in sales. “What can be less sexy than Grand Rapids and office furniture?” says John Bacon, an Ann Arbor, Michigan-based author who has interviewed Hackett and wrote a book about the revival of the football program at Michigan under Hackett’s direction.
But in many ways, management experts say, it’s a natural fit for the road ahead of him at Ford. For one, Hackett was the first non-family CEO to run Steelcase when he took over in 1994. While Ford has had plenty of outside leaders, the family remains a dominant presence that CEOs must learn to navigate, says Jeffrey Sonnenfeld, a professor at the Yale School of Management.
Bill Ford Jr. is executive chairman, and while the family owns less than 2 percent of the total outstanding shares, it holds some 40 percent of voting power thanks to its dual-class share structure. “He will know how to make that an asset,” Sonnenfeld said. With his background, Hackett, who is a personal friend of Ford’s, could “take that kind of ownership structure and make it a competitive edge where they’re with you rather than against you.”
At Steelcase, Hackett was known for being an early devotee of design principles that helped him transform the company, driving the shift from a private cubicle-centered workplace to the more team-driven, “open office” environment many companies use now. Realizing that people would be working more collaboratively, and more centered around mobile technology, he pushed for changes such as office furniture on wheels that could be reconfigured and tables that integrated with laptops to display individual workers’ screens.
“What he does really well, which is always going to be a constant in work and leadership, is looking at the future of people’s behavior,” says Kathryn Segovia, head of learning experience designat Stanford’s design school, who worked with Hackett at Steelcase in 2012. “Ford has largely seen itself as an automobile company for so long. What Jim is really great at doing is reframing a company around a mission; around a need that people have.”
Segovia, who studied the psychology of how avatars interact with each other in online environments for her Stanford Ph.D, served as one of Hackett’s outside “reverse mentors” that he brought in each summer to work with him. “He’s very happy and comfortable in a student mind-set,” she said.
IDEO’s Kelley, who is also the founder of Stanford’s design school, and who once had an always-on video conference line between his office and Hackett’s they called the “wormhole,” says Hackett often sends him links to issues going on in the design field before he knows about them.
As Ford grows its “mobility services” business, tech startups it chooses to invest in could also be encouraged by how Hackett managed its investment in IDEO years ago. In 1996, Steelcase took a majority stake in the design firm, letting it operate autonomously but using it to help infuse design sensibilities into the furniture company’s thinking. “He didn’t suffocate it, Sonnenfeld said. “He has a track record to prove he can be a magnet to pull in great talent, whether through [investments] or recruiting, and give them room to breathe.”
He also knew when it was time to let it go, being willing to sell back the majority ownership when IDEO’s partners were ready to be back on their own. According to one strategy consultant who worked with Hackett at Steelcase, “most CEOs would have said ‘tough luck, we own you.’ But not Jim. He realized that setting IDEO free and holding only a minority share would be the smartest thing.”
Kelley agrees that could be attractive to startups who grab Ford’s interest. “The main part of that story that’s encouraging to other companies is that typically, when a big company buys a small company, they say they’re not going to mess with it,” he said. “But I don’t think it happens that way that often, and in this case, it happened exactly that way. . . . He really gets it. It’s not benevolence. It’s just being really clever at understanding how to get the most out of the diversity of thought of other people.”
That IDEO partnership also helped deepen Hackett’s connections in the tech world — Kelley says he knows everyone at Stanford and says “he’s an insider here; he’s not going to miss what’s going on in Silicon Valley.” It was one thing Ford chairman Bill Ford cited Monday as having a big impact on his decision.
In a visit to the area last year, Ford said in a news conference, he watched tech executives greet Hackett with hugs. “A number of them said to me, my gosh, he’s one of the real original thinkers that we know and you guys are really lucky to have him,” Bill Ford told reporters. “To see Jim not only navigate that so well, but to be held in such high regard, it made an impression on me.”